How to Get a Used Auto Loan

January 26, 2012

A used auto loan is a great way to get a car if you can’t afford to pay cash, but have good credit and some savings to make a down payment.

To get ready for the process of obtaining a used auto loan, gather the required personal information including your social security number, your banking information, your credit score and copies of your last pay check and any current utility bills that are in your name.

Also, Make sure you know what monthly payment you can afford before securing a used auto loan. Consider your car insurance premiums, gas and car maintenance when determining your budget.

Types of Used Auto Loan Lenders

There are multiple choices for obtaining a used auto loan.

Auto Dealers: Dealers typically maintain financing relationships with several lenders so they are able to provide financing for a variety of customers. If you arrange your used car loan through the dealer, make sure you’ve finished negotiating the price of the vehicle before you begin to discuss financing, otherwise the two negotiations can become intertwined and confused.
Banks, Credit Unions: If you have good credit, 680 or higher, then your local bank or credit union might be the best option for a used auto loan since they typically will offer the lowest interest rates.
Manufacturers: If you are buying a late model used car (under five years old) and the vehicle is “certified” by the manufacturer, then you can potentially obtain a used auto loan from the manufacturer’s finance arm. Definitely investigate this option because the interest rates offered can be attractive.

Regardless of which type of lender you pursue, make sure to get multiple quotes for your used auto loan so that you can compare and select the one that best fits your needs. You can get an online used auto loan quote at LendingTree.com or CarsDirect.

If you have bad credit, the good news is that it is possible to get a used auto loan if you can show that you are capable of repaying it. Try sites like AutoLoanSolutions.com or InstantCarLoan.com to find a lender willing to finance such loans.